Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold fell 0.9% to close at an eight-week low above $1,216 as a rising hawkish comments from prominent Fed members boosted the dollar, diminishing appetite for alternative stores of value.

Kansas City Federal Reserve President Esther George said today that the Fed should continue raising interest rates despite some economic indicators "flashing yellow." George mentioned low first-quarter GDP growth and flagging auto sales as exceptions to an otherwise positive economic picture, warning that going too slow with further rate increases will risk financial instability.

George's push for higher rates comes one day after Cleveland Federal Reserve President Loretta Mester warned that the central bank must remain "very vigilant" because delays in tightening monetary policy could "risk recession."

In its post-meeting statement on policy last week, the Fed dismissed weak growth in Q1 as "transitory," signaling its intention to raise rates twice more this year. Friday's solid nonfarm payrolls report showing 211,000 new jobs created in April all but clinched a June hike, according to many analysts.

The dollar rallied 0.5% on the hawkish Fed speak, weighing on gold and other commodities denominated in it for international trade by making them more expensive in other currencies. Relief over moderate Emmanuel Macron's lopsided victory over rightwing Marine Le Pen in France's presidential runoff also eroded demand for safe havens.

The other precious metals also fell, with silver losing 1.2% while platinum and palladium dropped 2% and 1.5%, respectively.

At the Comex close: June gold fell $11 to $1,216.10; July silver dropped 19 cents to $16.07; July platinum lost $18.39 to $900.90; and June palladium shed $12.09 to $793.60 an ounce.